EasyJet anticipates a pretax loss greater than $1bn this year, but it said that its recovery is underway with a 400% increase in winter sun holidays after the UK government relaxed travel restrictions.
Due to the popularity of Canary Islands, Egypt and Turkey, the airline has added 100,000 seats. It expects to fly 70% of 2019 levels during the three months ending 31 December.
The October half-term bookings are also strong, especially to the Canaries, where easyJet has increased its capacity by 140% compared to 2019. The first half of bookings is double that of last year.
Johan Lundgren is the easyJet chief executive. He stated: It is evident that recovery is underway. EasyJet is seeing a return to business travel with both corporates and SME's attracted to our value, network, and approach to sustainability.
As well as increasing demand for leisure travel, we have seen the return of city breaks. Customers are looking for holidays and flights to popular winter sun destinations like Egypt and Turkey.
Grant Shapps (UK transport secretary) stated last week that he would prefer to eliminate costly PCR tests for international travelers returning to England in the October half-term and instead require a lower lateral flow test on day 2.
The pre-departure testing to enter the UK as fully vaccinated travelers has been eliminated by the government. It also reduced the number of countries on its red list from seven to seven.
Lundgren welcomed the changes, which resulted in a 400% increase in winter bookings to destinations like Egypt and Turkey within days of the announcement. He stated that easyJet holiday bookings for next years were more than twice as high as those made last year.
He said that European countries have taken much quicker steps to remove all requirements for travel vaccinations and urged the UK to follow suit to help the country return to pre-pandemic levels. EasyJet has returned to flying at preCovid levels in the European countries that made the changes, such as the Netherlands.
EasyJet's summer holiday season saw it increase its flying capacity to 58%, up from 17% the previous quarter. According to analysts' forecasts, it will lose between 1.14bn to 1.18bn in the year.
Recently, the carrier rejected a takeover offer from Wizz Air. It also strengthened its finances by raising 1.2bn. This allowed it to reduce its debt to 900m instead of 2bn. It also made 510m savings in the past year. This is almost half of its sustainable savings.
Airlines were forced to ground their fleets during the Covid pandemic's early stages. Despite economies rebounding, this has led to a slow recovery of international travel.
EasyJet's boss stated that rising oil prices wouldn't affect airlines profitability in medium-term because more than half the 2022 jet fuel required was hedged. We are in a good position. We have booked 55% of our requirements, jet fuel at $500, spot price $760. From that perspective, we were in a favorable position.
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Lundgren stated that summer 2022 fares were similar to 2019, but would be affected by demand and supply as the airlines increase their capacity next year. Lundgren stated that he didn't expect to see flying at the same level as before the pandemic, but that he would not be surprised if it happened.
Lundgren dismissed British Airways' potential threat, which is looking at opening a subsidiary at Gatwick airport. Lundgren stated that we have proven our ability to compete against any airline. He also said that easyJet, which operated 17.3m passengers in Europe, was the second-biggest airline and had managed to reduce its losses, unlike other airlines.
EasyJet shares fell 3.5% in early trading Tuesday morning, while Ryanair shares were 2% lower.